Global Edition

UK Price Index bounces back as US stands firm

7.53am 26th January 2009 - Management Topics

After falls across every sector in December the Price Index in the UK rallied to post the first January increase since 2005. The UK Price Index notched gains in every sector with an overall jump of 2.1% helping to make up some of the ground that was lost with the pre-Christmas reductions last month.

Growth of 1.7% in the Club Sector was helped by Fairway Woods increasing by almost 5% as the sector welcomed the debut of the new Titleist 909 range and the Ping Rapture V2 recovered from the impact of the December sales. Another of last month’s big losers, Drivers, posted a confidence boosting increase of 2.5% with models like the Yonex Nanospeed i and the Ping G10 recovering from major reductions in December.

Utility Clubs rose by 1.7% with models such as the Callaway Heavenwood and Ping Rapture V2 returning to their pre-Christmas levels and Wedges increased by 1.3% with the re-emergence of clubs like the Adams Puglielli. Irons and Putters, increasing by 1% and 0.8% respectively, recorded the smallest jumps in the clubs sector but retailers will take heart from the fact that irons such as the Cleveland C7 and C7 Tour range and Odyssey’s new White Hot XG and Crimson Series putters are yet to hit the UK stores.

In the Accessories Sector overall growth of 2.9% was driven by a jump of 4.7% for shoes and 4.3% for golf balls. Shoes benefitted from the introduction of three models at the top end of the market with the Adidas Tour 360 3.0, FootJoy Synr-G and Nike Air Zoom TW 09 all hitting the stores and enjoying the cache of celebrity endorsement. The increase in Golf Balls was thanks largely to a levelling out of the price drops used to encourage customers in the run up to Christmas and can be taken as real sign of optimism with the arrival of high profile new balls from Srixon, Callaway, Titleist and others expected in the run up to Spring.

Elsewhere in the Accessories sector, Trolleys notched up growth of over 3% thanks largely to the continuing presence of some the more expensive products like the Greenhill GreenMaster range and the re-emergence of models like the Powerhouse Electric Trolley in the market.

The Bag sector proved as steady as ever with growth of just 0.3%. That was, however, enough to ensure that Bags joined Shoes as the only markets to rise above the price they reached in November before December’s dip saw every sector tumble.

Across the Atlantic it was month of consolidation and stability for the Price Index in the USA with prices barely registering any changes. Although the American retailers would no doubt welcome a British bounce, the lack of movement did serve to prove that the drops of December were aimed at attracting shoppers rather marking the start of a downward trend.

With very few new products entering the market, the Clubs Sector experienced a month of almost complete stability. With growth of 3.5% Wedges were the top performer thanks almost entirely to the restoration of prices that were dropped in December when retailers used discounts on wedges to attract shoppers.

With a small drop of -0.6% the Putters sector was the only other market to experience a rise or fall of more than half a percent as some of the top end models left the index. With new models from Cleveland and other manufacturers set to hit the shops soon there can be confidence that January’s small drop will quickly be recovered.

The Accessories sector followed the trend of the Clubs sector with very little movement. Golf Balls was the only sector to move by more than 1% with an increase of 2.1% – heartening news with some of the big golf ball models of 2009 still to reach the customers. This month’s rise can be largely attributed to a restoration of former prices at the higher end of the market following the December drops, most notably with the TaylorMade TP Black and Red series.

The Price Index for January suggests that optimism in the golf industry – despite the battering of December’s festive sales – has not been misplaced. After recovering its poise and reacting positively to the drip feed of new products from manufacturers the UK Index was able to shake off the nerves engendered by last month’s falls. With more new products ready to hit the shops and with the more amiable golfing weather of the Spring hopefully around the corner there are enough signs of life across the various sectors to suggest that the widespread economic malaise might not be as seismic for golf retailers as was previously feared.

A steady month in America perhaps reflected the calm before the storm with new products set to start hitting the shops shortly after the PGA Merchandise Show in Orlando at the end of January.

With the wider American economy still experiencing a huge downturn the lack of movement in the US Index is to be welcomed as a sign that the golf sector does not seem tied to other struggling industries. As the country awaits the economic reaction to President Obama taking office, January seems to have given the US Index a solid foundation for 2009.

With a raft of new clubs in the pipeline and the major manufacturers unleashing their latest weapons in the battle for supremacy in the golf ball market, the signs for a good 2009 seem encouraging on both sides of the Atlantic as we approach the season proper and await the return of Tiger Woods.

Golfalot Price Index

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